Bribery in international business

08/01/2008 - The OECD Working Group on Bribery has serious concerns about Turkey's implementation of the OECD Anti-Bribery Convention. Turkey, a Party to the Convention since 2000, has yet to implement key elements of the Convention, including introducing corporate liability for the bribery of foreign public officials and effectively enforcing its foreign bribery offence.

The Working Group recommends carrying out another on-site visit to Turkey within one year to check on progress by the Turkish authorities to remedy these and other issues.

Turkey, for example, repealed corporate criminal liability for the offence of foreign bribery in 2005 and replaced it with "security measures" that do not meet the standards of the Convention. In addition, Turkey dismissed an investigation of a foreign bribery case allegedly involving a Turkish holding company and Turkish nationals in another country, for reasons that do not satisfy the Working Group. The case resulted in charges against the president of the company and several other company officials in the other country. Turkey also took two years to act on allegations of illicit payments to the Iraqi government by 139 Turkish companies in the United Nations Oil-for-Food Programme.

In addition to recommending that Turkey urgently rectify these problems, the Working Group recommends that Turkey:

Repeal a provision in the Turkish Criminal Code that releases offenders from penalties for the foreign bribery offence in exchange for having reported the offence to the law enforcement authorities;

Expressly deny the tax deductibility of bribes to foreign public officials in the tax law; and

Urgently establish awareness-raising programmes on foreign bribery for the Turkish public and private sectors.

The Working Group recognised that Turkey took an important step by amending its foreign bribery offence in 2005. Progress on certain supplementary issues include efforts made by Türk Eximbank, Turkey's official export credit support agency, MASAK, Turkey's financial intelligence unit, and the Ministry of Finance, to publicise the Convention. Türk Eximbank has also undertaken training and informational activities for staff and applicants for export credit support. Other initiatives include the preparation of regulations by MASAK to improve suspicious transaction reporting of money laundering transactions, the submission to Parliament of a draft Witness Protection Act, and an initiative to bring Turkish accounting standards in line with International Accounting Standards.

The Phase 2 Report on Turkey lists the Working Group's recommendations to Turkey on pages 62-66, includes an overview of the findings of the Working Group in the Phase 2 examination, and describes specific legal and policy features in Turkey for combating the bribery of foreign public officials. The future report on Turkey's additional examination will also be published. In addition, as with all other OECD Working Group members, Turkey will orally report to the Working Group on its actions to implement the Working Group's recommendations after one year. Turkey will also submit a written report to the Working Group within two years, which will be published on the OECD website.